"If you owe the bank a million, you have a problem; if you owe the bank a billion..." etc.

And the US owes trillions.

That cuts both ways. US entities own huge amounts of overseas assets including debt.

A more appropriate saying would be cutting off your foot to spite your leg.

Thankfully no one has done that yet.

yes. but most of it is not to other countries. Most government debt (over 80% globally) is privately owned through sovereign debt instruments like bonds.